Matrix announces profit lift, share buyback

Matrix Composites & Engineering has resumed dividend payments after reporting a net profit of $3.9 million on the back of a 21 per cent increase in sales revenue.

The company reported its revenue was $78.5 million for the first half of the 2015 financial year, and cited an increase in product sales and a more favourable exchange rate as the primary reasons for the jump in revenue.

The Henderson-based company manufactures and supplies specialised buoyancy and well construction products for the offshore oil and gas industry.

It cited an increase in sales of these products and a more favourable exchange rate as the primary reasons for the jump in revenue.

Matrix's earnings before interest, tax, depreciation and amortisation jumped by 76.7 per cent from the previous corresponding period, to $13.6 million.

Matrix chief executive Aaron Begley said in a statement the company increased sales and market share for its well construction products in its target North American market.

“Despite market uncertainty ... Matrix has the ability to flex production output up or down as required by the market,” Mr Begley said.

The company reported an improved cash flow for the six months to December 31, 2014, with a net cash balance of $7.2 million.

It attributed this to “tighter working capital management and margin improvement”.

Matrix’s order book backlog at December 31 was $US86 million, and the company said there is sufficient demand for its products from committed projects together with replacement work to support production over the next two years.

Mr Begley said he expected there to be a slowdown in new build drillships, however he said the company has experienced growth in enquiries from the replacement market.

“We believe this sector will continue to grow as drilling contractors shift their capital expenditure budgets towards improving existing vessels rather than committing to new build drillships,” he said.

Matrix also announced today it will undertake an on-market share buyback of a maximum 9.4 million shares, with all shares acquired to be cancelled.

The buyback will be conducted for 12 months, opening on March 6, and Argonaut Securities was appointed to facilitate the buyback.

Matrix shares closed the day’s trade up 13 per cent to 77.5 cents per share.